Presentation to Group Carrefour Direction Veille & Innovation November 2006
Executive Overview• We have identified an opportunity that will conservatively generate an additional £60 million for Retail Partners over the next five years• The opportunity takes no floor space and requires no capital investment by Retail Partners• The opportunity is well supported by a number of leading suppliers including P&G, Mars and Unilever
Who are The Light Agency?• The Light Agency is a multi award winning, international mobile marketing services company with a blue-chip client list including P&G, Mars, Unilever, Warner Music Group and News Group Ltd.• Our flagship technology M BAR GO® is widely recognised as the best solution for connecting mobile phones with retailer’s EPoS systems, a view shared by both the retail and marketing industry and by one of the world’s leading handset manufacturers.
We have won more awards than anyone else in mobile-to-retail marketingMobile Marketing Retail Solutions DR Intelligence Revolution Retail Week Red Herring Most innovative European Intelligent Most Innovative Retail 100 use of Retail Innovation Award Digital Business Technology Europe mobile in Technology & 2005 Initiative of the Award marketing Solution of FMCG Award & Year & the Year & Best Use Best example Intelligent Application ofof mobile creating of Data (Mobile) Wireless 2006customer benefit Award
What is M BAR GO®• M BAR GO® is patent protected solution that we describe as a glue which sticks three worlds together; mobile handsets, EPoS systems and an intelligent, flexible database.• M BAR GO® is compatible with all handsets across all mobile networks. It is compatible with most EPoS systems and we can confirm that it is compatible with many of Carrefour Group’s systems.• M BAR GO® enables us to send targeted discount coupons to opted-in members of clubs.• M BAR GO® is proven, supported by leading manufacturers and very scaleable.
M BAR GO®Consumer Experience
M BAR GO® Benefits
Groupe Carrefour customers benefitfrom M BAR GO® in a number of ways1. More savings in store – instant gratification2. Enhances the shopping experience through an interactive two-way dialogue3. Mobile is the most ubiquitous consumer electronics device; your customers are never without their phone4. Wider customer appeal. No need to clip coupons or forget to bring coupons to store5. Extra mobile-related features e.g. free ringtone or game with purchase6. Multi-channel - easy to use in store & online
Groupe Carrefour benefits fromM BAR GO® in a number of ways1. Substantial new marketing revenue stream2. Creates improved dialogue with customers3. Increases transactional value and drives traffic to store4. Improves customer data/targeting - Real time basket data/customer data - Price Modelling - Ability to drill down to individual store level5. Powerful tool to clear stock6. Ability to integrate into multi-channels (online, in-store) to provide immediate ROI measurement on marketing spend7. Creates a buzz in the marketplace
Manufacturers benefit from M BAR GO®1. Offers are targeted using real-time shopping data2. Robust pricing model and targeting3. Faster turnaround than paper coupons4. Real-time reporting of redemptions5. Further branding opportunities for both manufacturer and retailer (e.g. Baby development tips sent to mobile when customer buys Pampers enhances the shopping/product experience)
The customer experience
M BAR GO® Consumer Experience1. Customer opts in to the club by text to a shortcode2. Barcode is sent to customer’s mobile phone - We call this barcode a Unique ID. No two mobile phone subscribers are ever issued the same Unique ID.3. Member receives offers - Offers become more targeted every time the member redeems offers.4. Member requests offers - Members can text us at any time asking for a special deal.
M BAR GO® Consumer Experience5. Member shows their Unique ID at point-of-sale - The Unique ID is scanned by the sales assistant using a standard barcode reader.6. Discount is given automatically - One scan of the barcode, regardless of how many offers are being claimed.7. Thank you message – Retailer/Advertisers can choose to send a thank you message to the consumer for purchasing their brand or reward the customer with content, ringtones, mobile top ups etc.
How Group Carrefour can maximisethe M BAR GO® ConsumerExperienceHere are just some ideas how Groupe Carrefour can enhance the customer experience:• Invite to special events in store• Target new product alerts• Competitions• Store Openings• Integrate the multi-channel message• Instant gratification
Manufacturer testimonials - P&G “M BAR GO represents an amazing opportunity for P&G to connect with consumers, offering a direct response call to action via mobile. With the right retailer buy-in the technology could genuinely revolutionise the direct to consumer market”. P&G UK
Manufacturer testimonials - Unilever “M BAR GO® offers such a fantastic means of targeting, from location of shop through to actual shopper behaviour (what else do they purchase with our products? How often? etc...). We would definitely recommend working with this technology, as well as the team”. Unilever UK
Segmenting & targeting
Segmenting & targeting• The M BAR GO® Database collects all of the customer’s transactional data when the barcode is scanned• TLA is able to segment and target customers based on their product preferences, purchasing habits, frequency of visits, time and date etc• By targeting a customer with the right offer at the right time we generate a behaviour change• We can also send time stamped offers, seasonal offers, invitations, updates, rewards, games, ringtones etc.
Sainsbury’s Case Study
Sainsbury’s Case Study• Sainsbury’s invited TLA to conduct a pilot within a television region; 35 stores in the city of Hull in their ‘Sainsbury’s at Jacksons’ stores• TLA funded and managed technology integration, consumer marketing, staff training, manufacturer support and customer support• The case study has won over a dozen industry awards including European Retail Solutions Grand Prix and Retail Week
Sainsbury’s Headline Results• Over 6% of population signed up to club in first two months• Over 250+ brands supporting the programme• Less than 14 days IT resource was required from Sainsbury’s head office• Average transaction value of programme members is double non-members’• Average items in basket of programme members is double non-members• Manufacturers report significant uplift in sales when online with programme
SHOP SCAN SAVEincreases basket size £10.42 Jacksons regular customer £8.72 Jacksons SSS customer Feb 06 Jacksons SSS customer July 06 7.05 5.9 £4.89 3.6 Av. spend per basket Av. no. of items per basketSource: Innovetra Basket Analysis. Dec 2005
High rates of interactionindicate loyalty and interestOct-Dec 2005 we received over 25,000 txts (av. 250/day).
Mobile Market Overview
Mobile phone ownership and usageis universal and growing in the UKMobile handset penetration 82% (age 16+) 50% 2+ handset penetration there are more mobile phones in the UK than peopleVery high turnover of older phones 18m new handsets sold each yearRapid growth set to continue 2010 will index 270 vs 2005 (retail value)Source: Mintel Apr 2005
Every socio-demographicgroup uses a mobile phone Mobile phone penetration (%) The younger the consumer is,Men 82.2 Single 87.8 the more likely he/she is toWomen 80.1 Married 82.5 own a mobile phone; much higher levels of penetration15-24 93.2 Greater London 81.5 South East/East will be seen in future years.25-34 91.9 83.8 Anglia35-44 89.7 South West 82.245-54 83.2 Wales 79.6 Don’t forget the older55-64 75.3 East and West 82.9 generation; 75% of 55-64s Midlands65+ 57.0 North West 79.7 own a mobile phone. Yorkshire & 78.2 HumbersideAB 85.6 North 77.9C1 83.5 Scotland 76.3C2 81.4D 78.1E 65.5 Source: Mintel Apr 2005
Mobile phones are not justfor phone callsSMS represents one third of all mobile traffic 1 txt users more likely to be C1C2D (AB 25% text traffic, C1 32%, C2 36%, DE 35%) 2UK ringtone market worth £120m in 2004 twice as much as CD singles market3m cinema tickets distributed in ‘05 via mobile phones 1 2 Mintel Apr 2005 KPMG 2004
Why mobile?More shoppers own a mobile than justabout any other consumer electronicsdevice.Your suppliers are investing heavilyinto mobile marketing. Our brandpartners, P&G, Unilever,Masterfoods, Nestlé and Coca Colajust to name a few are focusing onmobile marketing opportunities.Mobile is the only marketing channelthat can deliver immediate interactionin-home and in-store.
Groupe Carrefour:Mobile Club Forecast
Membership Projections• We have developed a model for projecting membership acquisition of a mobile savers club for Carrefour retailers• The model assumes stores recruit 5 members per day and that the Carrefour subsidiary has 500 stores• The model does not take into account new store openings/expansion• An accurate projection can be created on request by Groupe Carrefour retailers to The Light Agency
Five members/day per store Members opted-in to M BAR GO® Year 1 900,000 Year 2 1.8 million Year 3 2.7 million Year 4 3.6 million
Revenue Model• Manufacturers are charged in two components; - 7 pence per offer sent - 15 pence per offer redeemed• Members receive 5 offers a week• Redemption rate of 2% built into revenue model• The following pages show revenue after direct costs (SMS)
Two members/day per store Members Annual opted-in to Revenue after M BAR GO® direct costs Year 1 900,000 £11.5 million Year 2 1.8 million £23 million Year 3 2.7 million £34.5 million Year 4 3.6 million £46 million
Commercial Proposal • The Light Agency will fund all costs associated with technology integration and rollout including; - EPoS integration associated IT costs - Staff training materials - Head office support - Member support line • Groupe Carrefour will fund all internal (store) marketing to promote the service to its customers. • Groupe Carrefour will receive between 30% and 50% of revenue after direct costs (dependant on number of members recruited in store).
Carrefour Revenue Share Members Annual opted-in Revenue Carrefour Carrefour to after Share Revenue M BAR direct GO® costs £11.5 Year 1 900,000 30% £3.45 million million £23 Year 2 1.8 million 35% £8 million million £34.5 Year 3 2.7 million 45% £13.8 million million £46 Year 4 3.6 million 50% £23 million million
Increasing Turnover by IncreasingAverage Transaction Value• Our programme with Sainsbury’s has recorded a significant increase in Average Transaction Value amongst members (non members ATV = £4.89/ members ATV = £10.42)• This represents an increase in ATV of 113%• We achieve this uplift in ATV by persuading the shopper to buy more items (non members = 3.6 items/members = 7.05 items)• For the purpose of this presentation we have assumed an increase in ATV amongst members of 20% and an ATV of €20 and visits a store 24 times a year
Increasing Turnover by IncreasingAverage Transaction Value Members opted-in Historical Recording a to ATV 20% uplift M BAR GO® €432 €86.4 Year 1 900,000 million million €864 €172.8 Year 2 1.8 million million million €1,296 €259.2 Year 3 2.7 million million million €1,728 €345.6 Year 4 3.6 million million million
Groupe Carrefour Launch Strategy
Carrefour Launch Strategy -Our Commitment• We will establish operations in close proximity to your offices• We will work with your EPoS supplier, your IT team and your online agency to integrate M BAR GO® with your systems• We will engage with your category managers to understand your preferences for manufacturer partners• We will develop training, support and incentive programmes for your sales consultants• We will provide exemplary support to your customers, stores, suppliers and head office• We will grant channel exclusivity for 12 months from the time of a national launch
Carrefour - Our Long termCommitment• We will respect your members and will never share their information with any third party• We will never send your members an offer without asking you to sign-off on the message and the offer first• We will provide you, your customers and your suppliers with exemplary service• We will make it easy for you to audit our data• Wherever possible, we will adapt M BAR GO® administrative procedures to follow your standards• We will hold ongoing dialogue with your managers to understand how we can improve M BAR GO® for you
EPoS Integration Strategy• M BAR GO® can be easily integrated into Carrefour’s EPoS systems• We will consult with your EPoS suppliers and engage directly with them to manage integration• Integration typically takes less than 60 days• Full documentation of the M BAR GO® integration will be shared with Carrefour• Once integrated, M BAR GO® will be rolled out nationwide with the next release/update of your EPoS
Member Recruitment Strategy• Multi-channel recruitment strategy: Television, PR, Radio, In- store (Colleague and POS), Word of Mouth, Online, Field Marketing, Viral Campaigns• TLA would leverage their strong relationships with leading manufacturers including P&G, Unilever, Mars, Coca Cola for further incentives• Sales consultants will be rewarded for signing up members to the programme
Further Innovation fromThe Light Agency
Snap works with any camera-phone Take snap of Send by MMS Show youradvertisement or to 62111 membership packaging ID barcode atwith camera phone the checkout and receive your discounts Receive offers and/or content
SNAP lets shoppers connect with brands with one easy click• SNAP SEND SAVE technology instantly matches pictures taken by consumers to any hosted media• A scalable, flexible patented solution which deploys image recovery, pattern recognition and image matching algorithms• Service supports all camera phones using picture messaging on the handset – including self-service interfaces for visuals, mobile content, and access to usage data• High capacity messaging and mobile application infrastructure has been developed with support for MMS, SMS, and WAP, and web services interfaces are provided for third-party integration
Overview of service
• Entertainment As Reward (EAR) is a loyalty program and can be compared to Nectar and Air Miles.• EAR is targeted at Generation X and Y (18 to 35 year olds)• Members of EAR earn points by shopping in the right places, buying the right brands, using the right mobile network or bank and partying in the right places• Members of EAR spend points on entertainment, which is downloaded to their mobile phone or PC
• The ﬂagship tenant of EAR will be a Mobile Network Operator• Partners of EAR will include: Retailers Leisure & Hospitality Bank/Building Society• Other sponsors of EAR will include: Handset manufacturers FMCG manufacturers Airline/Hotel/Car rental
Thank you For more information pleasecontact Marc Lewis, Chairman, +44 7980 296 605